Morgan Stanley analysts stated that despite community resistance faced by AI data centers, the AI capital expenditure story remains intact, with hyperscale cloud service providers' capital expenditure expected to exceed $1 trillion next year.
Ariana Salvatore, Head of US Public Policy Research at Morgan Stanley, noted in an interview with CNBC that AI data centers are facing community resistance due to high electricity costs, water consumption, and construction disruptions, leading to stricter permitting and auditing. However, she believes that the AI capital expenditure story remains intact and the outlook is constructive, with hyperscale cloud service providers' capital expenditures expected to exceed $1 trillion next year. She added that this resistance could lead to "timing delays" and "geographic dispersion" for projects, meaning projects might be postponed in politically sensitive areas and shift towards regions with stronger energy, water, and public support.
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